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Wednesday, June 19, 2024 | Back issues
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Supreme Court takes up fight over Biden’s student loan forgiveness plan

The Biden administration asked the justices to clear legal hurdles holding up a debt-forgiveness plan unveiled in August.

WASHINGTON (CN) — The Supreme Court agreed Thursday to take up a legal battle between red states and President Joe Biden over debt forgiveness for student loan borrowers.

Biden went to the high court after a lower court halted his action on student debt relief. The justices opted to decline the president's initial ask, keeping the program on pause, and will instead hear a full briefing on the case in February. 

Reaction to the proposal Biden unveiled in August has been mixed. While falling short of some expectations, the plan would eliminate debt from the neediest of borrowers, fulfilling at least in part a long-term goal of Democrats. Low-income borrowers would receive the most assistance under the program, receiving $20,000 in debt forgiveness. Other qualified borrowers would receive up to $10,000 in forgiveness. 

Once it came time to enforce his plan, however, Biden ran into trouble over his decision to authorize it under the Higher Education Relief Opportunities for Students Act of 2003. Passed in the wake of the 9/11 terror attacks, the Heroes Act allows the education secretary to cancel student loan debt to prevent borrowers from facing dire financial hardship in times of war or national emergency. Biden argued that the law was a good fit in the pandemic era as borrowers faced new financial hardships because of Covid-19 business disruptions. 

Among numerous legal challenges, Biden has faced suits to stop his plan from taxpayers in Wisconsin and a group of student loan borrowers. Most of these entities have seen their cases dismissed failed for lack of standing. 

One of the challenges that remains ongoing came from Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina, which won relief at the Eighth Circuit. The six Republican-led states contend that Congress never intended for the Heroes Act to be used in this way. The states also cite pandemic-era Supreme Court precedents, including a decision that shot down the eviction moratorium from the Centers for Disease Control and Prevention and the vaccine-or-test mandate from the Occupational Safety and Health Administration. 

Following the Eighth Circuit’s ruling, the Biden administration asked the court for an emergency order to allow the program to go into effect. U.S. Solicitor General Elizabeth Prelogar told the justices that Biden’s use of the Heroes Act falls directly in line with Congress’ mandate. Prelogar also cites former President Donald Trump’s student loan pause to refute claims that Biden’s authority is outlandish. 

The red states are not the only successful challenge to Biden’s plan. Myra Brown and Alexander Taylor — who both took out loans for school — were able to obtain an injunction from a Texas judge. Brown doesn’t qualify for Biden’s plan because her loans are commercially held, and Taylor isn’t eligible for the highest forgiveness threshold because she didn’t receive a Pell Grant. 

Brown and Taylor’s suit was heard by a federal judge in Texas who declared the program unconstitutional. The ruling was based on Biden’s use of the Heroes Act. On Wednesday, the Fifth Circuit declined an emergency relief application from the Biden administration in this case. 

Follow @KelseyReichmann
Categories / Appeals, Consumers, Education, Financial, Government, Law, National

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